Top strategist: Real fiscal cliff deadline is inauguration by Stephen Gandel @FortuneMagazine December 28, 2012, 10:20 AM EST E-mail Tweet Facebook Google Plus Linkedin Share icons FORTUNE — Jim O’Neill, the chairman of Goldman Sachs Asset Management, says President Obama and Republicans have another three weeks to make a budget deal. He says if there isn’t a deal to avoid the fiscal cliff by inauguration day, which is officially January 20th, the market will plunge. “The market is still assuming we will have a deal by inauguration day,” says O’Neill. “If not, problem.” While stocks have fallen a bit recently, the market has yet to freak out about the fiscal cliff – the mix of tax increases and government spending cuts that are set to begin January 1st. Some have argued that since the fiscal cliff is actually more like a slope, with changes being phased in over time, the market impact will be gradual as well. Last week, I argued that the fiscal cliff might not actually hurt the market at all. MORE: What will happen if we go over the fiscal cliff Goldman’s O’Neill, though, says that while the market won’t likely plunge on January 2, he thinks stocks won’t shrug off the fiscal cliff for much longer, either. O’Neill, a widely followed market strategist, is best known for coining the term BRICs more than a decade ago to describe the growing emergence of the economies of Brazil, Russia, India and China. “There is this view, particularly among some of these Tea Party guys, that maybe to get a proper budget breakthrough it’s not a bad thing if there’s a crisis,” says O’Neill. “That thinking is a bit dangerous.” The problem, according to O’Neill, is there’s not that much to like about U.S. stocks in general. He says U.S. stocks are not nearly as attractive as they were a year or two ago, when the U.S. was first coming out of the recession. That’s why O’Neill says the lack of a fiscal cliff deal could hit the U.S. stock market, which has been coasting along on not so bad news, harder than some people think. MORE: Tax hikes for the rich? Blame Bush What’s more, O’Neill says U.S. markets have benefited from not being Europe. Debt problems there have caused investors to seek out the safety of the U.S. O’Neill says that seems to be changing. He thinks by mid-year we could have a deal in Europe that will make investors feel a lot more comfortable with the Euro’s debt problems, and as a result shift more and more of their assets out of the U.S. “The meetings I have had with very large investors recently, particularly in Asia, left me with the idea that there is a growing realization that Europe is dealing with some of its fiscal issues much better than the U.S.,” says O’Neill.